I heard Warren Buffett has a lot of cash right now – does that mean he’s worried about a market crash???

Warren Buffet has two rules for investing.

1 Rule 1, never lose money.

Rule 2, never forget rule number 1.

So, the fact that Warren Buffet has so much in cash right now speaks to his rules.

Warren Buffet also has a favorite market indicator he relies on and that indicator is saying stocks are in trouble.2

 

We are currently in the second-longest bull market in history, so the question becomes, how long will this last?

The market goes up, the market goes down, and while everyone may have opinions or indicators they use to predict what the market will do, no one knows for sure.

If you are worried about losing money, there are a couple of things you should consider.

One, maybe it is time to take some of the gains off the table.

  • There are other investment options where you can protect your principle and still maintain some growth potential.
  • Many of these investment vehicles also have income features that may be a good way to plan for retirement income.

 

Two, you may want to have a risk profile completed on your account. Often we see someone who says they are conservative, but their investments are aggressive.

  • It may be your tolerance for risk has changed, or it could be your portfolio has changed over time. It is good to know what the downside risk of your portfolio is.

(This can be done with third party analytic tools such as Morning Star and looking at standard deviation over time. You will want a professional to run these reports for you.)

Bottom line, you need to arrange your investments in such a way that you will be okay if the market goes up or down or stays the same. If you are worried, it is time to take action, maybe get a second opinion.

For more information or to submit your question, go to www.creatingyourdreamretirement.com

Sources:

1http://www.investopedia.com/financial-edge/0210/rules-that-warren-buffett-lives-by.aspx

2http://time.com/money/4947363/warren-buffett-stock-market-indicator/

 

Michelle Bertram and Beverly Bertram are financial advisors living in Mineral Point WI and serving the surrounding communities. Michelle Bertram does financial planning for retirees along with business consulting. Beverly Bertram specializes in retirement planning and income planning for her clients. Michelle Bertram and Beverly Bertram are authors of the book, Creating You DREAM Retirement and creators of the DREAM Retirement Process.
Serving Madison WI, Verona WI, Mount Horeb WI, Barneveld WI, Dodgeville WI, Dubuque IA, Platteville WI, Lancaster WI, Cuba City WI, Fennimore WI, Darlington WI, Monroe WI, Spring Green WI, Black Earth WI and beyond.

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